Man blows the whistle on Hyundai safety

Reuters, YONGIN, South Korea

South Korean engineer Kim Gwang-ho flew 11,000km to Washington last year to do something he never dreamed he would: He reported alleged safety lapses at Hyundai Motor Co — his employer of 26 years — to US regulators.

Citing an internal report from Hyundai’s quality strategy team to management, Kim told the US National Highway Traffic Safety Administration (NHTSA) the company was not taking enough action to address an engine fault that increased the risk of crashes.

Hyundai denies the allegations. The company promotes openness and transparency in all safety-related operations and its decisions on recalls comply with both global regulators and stringent internal processes, Hyundai said in an e-mailed statement.

Reporters were unable to review the internal report cited by Kim due to a court injunction filed by Hyundai.

In a culture which values corporate loyalty, Kim was moving against the tide when he handed the NHTSA 250 pages of internal documents on the alleged defect and nine other faults.

South Korea has been buffeted by corporate scandals, many within its family-run conglomerates or chaebol, but has seen few whistle-blowers. A high proportion are sacked or ostracized, despite legislation to protect them, according to advocacy groups.

Kim, fired in November last year for allegedly leaking trade secrets about the company’s technology and sales to media, has since been reinstated by Hyundai after a ruling by a South Korean government body under whistle-blower protection laws.

Hyundai has filed a complaint disputing the decision.

“I will be the first and last whistle-blower in South Korea’s auto industry. There are just too many things to lose,” Kim said in an interview at a bakery cafe run by his eldest daughter. “I had a normal life and was better off, but now I’m fighting against a big conglomerate.”

Corruption at chaebols is at the forefront of the political agenda for newly elected South Korean President Moon Jae-in, voted in after a bribery scandal involving Samsung chief Jay Y. Lee and former South Korean president Park Geun-hye.

On Friday, Hyundai and associate Kia Motors Corp said they would recall a further 240,000 vehicles in South Korea after the transport ministry issued a rare compulsory recall order over defects flagged by Kim.

Kim, now 55, says he did not start off intending to blow the whistle.

A loyal salary man, he studied precision mechanics and joined Hyundai in 1991, working on engine testing and planning.

In 2015, Kim transferred to the Quality Strategy team, which decides recall issues.

That same year, Hyundai announced a US recall of half a million Sonata sedans due to manufacturing flaws that could result in engine stalling.

Citing the report by the Quality Strategy team, Kim said Hyundai knew the issue was more serious and widespread, affecting more models and the South Korean market. The problem was not just with the manufacturing process, but also engine design, meaning Hyundai would need to fix engines in all the affected cars, at a steep cost, he said.

Hyundai rejected those claims, saying it was closely monitoring the issues brought up by Kim both before and after he raised them.

Kim shared his misgivings with some local media and South Korean regulators after his tip-off to the NHTSA.

One South Korean Ministry of Transport official said that led Hyundai to investigate and recall vehicles in South Korea.